Babe Ruth was born into a poor family in Baltimore and died young as a wealthy man and the hero of the golden age of sports. Although he didn’t look like a heroic athletic and roamed well outside of fair territory, he broke ground in athletic and business achievement. He had good coaching and support in both arenas and knew which rules to break (most) and when to listen to his coaches and he had some of the best.
Ruth’s life is swathed in myths and we will never know the full story. But what facts we know and the many myths are instructive. Ruth was a great athlete and dramatically changed the game of baseball – then the national pastime – forever. And despite his great hunger and appetites, he achieved success on and off the field, making up in part for the deprivations of his youth.
At age 7 he was a wild youth and his parents shipped him to reform school at St. Mary’s Industrial School in Baltimore. He remained there till the end of his teenage years and the beginning of his life as a professional baseball player. Life at the school was regimented and austere; he only got meat once a week and had to learn a trade and work. He became a proficient shirt-maker and carpenter. At the school he also became a great baseball player under the tutelage of Brother Matthias.
At 19 he signed a contract with the Baltimore Orioles, then a minor league team. Soon they sent him off to the Boston Red Sox in 1914. It was not love at first sight and he spent part of that truncated season in the minor leagues, helping the Providence Grays win a minor league pennant.
Back in the majors the next season he began to establish himself as the best left-handed pitcher in the American League and a strong hitter. Short of cash, the Red Sox sold Ruth to the New York Yankees in 1920 after three World Series Championships. At that time, the Red Sox had won five of the 16 World Series and the Yankees had yet to win their first American League pennant. He went on to lead the Yankees to four World Series Championships and create an aura of success there.
Ruth was already the best home run hitter in baseball and 1920 ended the “dead ball” era. The livelier ball and some other changes opened up the game and with Ruth in the daily lineup, he led the charge,
In 1923 the Yankees opened up Yankee Stadium, “the House that Ruth built.” He was the biggest draw in the major leagues at home and on the road. He soon broke records for player salary as well as for batting and pitching. Prior to Ruth, Ty Cobb’s salary of $25,000 was the highest in baseball history. This at a time when $10 or $20 a week was respectable if not great pay. At his peak, in 1930, Ruth earned $80,000 a year, more than President Hoover. Asked about that, Ruth said, he’d had a better year than Hoover and that was demonstrably true. For 14 straight years, Ruth was the highest paid player in baseball with no one close, another record that has never been equaled or approached.
While Ruth made a lot of money, in the early years of his career, he kept little or none of it. He was generous and lived high and partied wherever he went. He bought cars as fast as he wrecked them and the beer in his hotel rooms was always cold and plentiful. His appetite for food and many vices was brobdingnagian. In addition to major league baseball, he made money barnstorming with Lou Gehrig around the country, appearing on the Vaudeville circuit, in the movies and making endorsements.
In 1927 his fortunes changed dramatically for the better. That year the Yankees fielded one of the great all-time teams with Ruth in the middle of a lineup termed “Murderer’s Row.” He also became the first baseball player to earn as much or more off the field as on it in the regular season. That year he also turned most of his financial affairs over to Cristy Walsh, the first real baseball agent. Walsh was a promoter, public relations man, business manager, investment manager and all-around trusted adviser. It isn’t clear, how Walsh first established the relationship. But the story I like best happened when Ruth was living in the Ansonia, a famous apartment building on Broadway in the Upper West side of Manhattan. Walsh described hearing that a local deli was going to be delivering a shipment of beer to Ruth’s apartment and Walsh bribed the deliveryman to let him bring up the beer. Once there, Walsh got Ruth to agree to let him represent him.
No one now knows the true story of the beginnings of the relationship but we do know that Walsh had a talent for ingratiating himself with successful people and in turn did well by them. Over the next few years Walsh expanded his relationship with Ruth until he took over most of his business affairs and kept that up until 1938, three years after Ruth had retired from baseball.
In 1927 Ruth had run out of money as a result of high living, record fines and suspensions and an inability to keep money in his pocket. Walsh loaned Ruth money and in turn had Ruth turn over much of his incoming funds to Walsh. That year Walsh set up a trust for Ruth at the Bank of Manhattan and had Ruth put all of his non-baseball earnings into the trust. By the early 1930s, the trust grew to over $200,000.
Despite the stock market euphoria, the bank invested the trust conservatively with seventy percent in bonds and thirty percent in dividend paying stocks. Even at the peak of the stock market in 1929, bond interest rates and stock dividend yields were attractive by today’s standards. Government bonds yielded close to 3 percent as did Blue Chip stocks while corporate bonds yielded 5 percent. During the worst years of the Depression, while economic activity plunged and unemployment soared, Ruth’s trust continued to have positive returns.
Eventually the bank returned almost half a million dollars in principal and earnings to Ruth. Left in his own hands, the money surely would have vanished with hardly a trace. At that time and for decades later, ball players usually ended their careers with little or no money left and having to enter new careers to support themselves.
Ruth was able to enter retirement having played in the first two All Start games and as a charter member of the new Baseball Hall of Fame with no concerns about money. Ruth could spend his time golfing and fishing with no money worries although he continued to earn money from endorsements and appearances for the rest of his life. He died at age 53 of cancer, having been one of the pioneers of chemotherapy and as a result having a short remission of his cancer.
In an age of heroic sports heroes and supportive sports writers, Ruth’s star shined the brightest. And through his fortuitous relationship with the pioneering agent Cristy Walsh, Ruth was also successful for himself and in breaking barriers for other players. Ruth often lived to excess and not all of his life was admirable but despite his humble roots he starred on the grandest stages and brightened the lives of many people around the world.
Much of the information for this story comes from The Big Fella by Jane Leavy, the Wikipedia article on Ruth and other stories available on the Internet about Ruth and books and stories on the financial conditions before and after the stock market crash of 1929.
